Xero Bookkeeping using Value-Based Pricing – Learn from your kid & their chores

I participated in an interesting project this week that clearly defined Performance Based Pricing. It came about because paying a flat wage just didn’t produce the desired outcome. Let’s just say that the kids didn’t complete all their chores and their mum got tired of paying pocket money while having to chase them up every day – sound familiar?

Xero have always promoted Performance Based Pricing (also known as Value-based pricing) as the best way to run a bookkeeping business but have the flexibility to operate your own hours. It’s based on paying for outcomes rather than time. It encourages workers to use technology to be more productive.

How much is cleaning worth?

I don’t like to shout this too loud to my male friends but putting a price on each mundane task that parents do everyday means you can start to put a dollar figure on this kind of work.

It makes you think long and hard about how much it’s worth to have a meal cooked compared to vacuuming the carpet or washing the dishes. It also teaches your kids why there are jobs and how people earn money – by doing things that other people don’t want to do.

The problem with most tasks that we all do is that someone can do a mediocre job and take 2 hours while someone can do an excellent job, use different tools and take one hour.

Receipt Capture software saves time but involves change

Receipt capture software removed a lot of the time consuming bookkeeping work that junior bookkeepers perform. The problem with this work is that it is usually NOT the bookkeeper that wastes time on this task but the business owner not being organised enough to have the source documentation when the bookkeeper needs it.

One way of limiting the work you do as a contract bookkeeper is to offer your “Fixed Rate” provided that the business uses receipt scanning software for all receipts. This then puts the onus back onto the business owner to make sure that they learn how to use the new software and then use it all the time when they pay for expenses with their business credit card.

One of your disclaimers in your fixed price bookkeeping plans could be that you charge a higher “hourly rate” for doing any catchup bookkeeping that involves time wasting tasks like chasing up old receipts and source documents.

If we compare this mundane bookkeeping work to meal planning and chores for the kids to do at home you could increase the money paid for more complex tasks (like cooking) and less for making their beds in the morning. This value based pricing is all about incentivising productive work.

Our Receipt Scanning training course is included in

• Xero COMPLETE training course,
• MYOB COMPLETE training course, and
• QuickBooks Online COMPLETE training course,

as well as the Bookkeeping Academy Training Course Combinations as a FREE Student Inclusion.

How much is healthy eating worth?

With home delivery and fast food it is very easy to see why single people or couples eat “take away” meals many nights of the week. You just tap the meal you want, pay the money and it arrives at your door step within a short amount of time, but it is the healthiest food to eat regularly?

In the above scenario you could easily spend more money on fast-food and ready-to-eat food than buying fresh food at the supermarket and preparing meals at home. The benefits of eating fast-food are that you

1. don’t need to buy the individual ingredients,
2. don’t need to cook, and
3. don’t even need to clean up.

The first step before even going to the shops is meal planning and that task takes up a lot of thinking, planning and scheduling. Using Microsoft Excel Beginner level skills and our meal planning exercise file you can start the process of eating healthier. If you do follow this path then you’re going to experience a number of chores that are unavoidable.

The main chores for eating healthier at home (once you’ve done your meal planning) are:

1. cooking the meal
2. setting the table (assuming you’re all eating together!), and
3. doing the dishes

Pay your kids and teach them about value

Call me old fashion but I think you can involve your kids in this whole process. Think about it, they’ll be able to contribute to what is cooked and how it’s cooked and then help in the cooking and cleaning. When they taste something that they helped create it makes the whole process a lot more interesting and something that they’re more likely to want to do in the future.

They’ll become more self sufficient eat healthier and even SPEND LESS TIME ON DEVICES! When you really delve into the different foods and tastes of different fruits, vegetables and herbs you might find that they like to take on more of the responsibility by making the entire dish themselves.

List of kids chores and their value

In our Microsoft Excel Training Course BUNDLE for beginners we’ve added an Excel exercise file that includes a list of chores and the value associated with it. You’re welcome to use this Excel template as you choose and change the prices based on how much you can afford.

After compiling the list we realised that it will get harder to convince your older teenage kids to cook a meal for the family for $10 than for them to go and work a part-time job and earn twice as much. That might be a different spreadsheet in the future.